Telcos owe DoT over Rs2,100-cr penalty for subscriber non-verification: CAG

Telecom service providers such as Airtel, Vodafone, Idea Cellular, Reliance Telecom, Aircel, Tata Tele and BSNL together owe the Department of Telecom (DoT) Rs2,116.95 crore in penalties for non-compliance of subscriber verification, the Comptroller and Auditor General said in its report.

The telecom department has also failed to achieve 100-per cent compliance to subscriber verification rules because of "ineffective monitoring and weak control by DoT and the TERM Cells," says the CAG, adding that compliance of subscriber verification rules are important for national security.

According to the data provided by DoT to CAG, RCom has maximum outstanding due of Rs594.76 crore, followed by Airtel Rs502.8 crore, Aircel Rs402.31 crore, BSNL Rs269.42 crore, Vodafone Rs203.04 crore, Idea Cellular Rs74.15 crore and Tata Teleservices (TTSL) Rs70.47 crore.

"We further noticed that out of Rs2506.80 crore of penalty levied by the DoT and the TERM Cells during 2009 to 2012 for defective CAFs, the service providers had paid only Rs389.85 crore," the CAG said in its latest report.

The Telecom Enforcement Resource and Monitoring (TERM) Cell levies Rs1,000 penalty for every wrong Customer Application Form (CAF) filled for mobile connections if 95 per cent of forms are correct. The penalty goes up to Rs5,000 per wrong CAF if compliance rate is between 90-95 per cent and further to Rs50,000 per form if compliance is below 80 per cent.

As per CAG estimates, the total penalty in the year 2012 alone works out to be Rs4,204.33 crore against the Rs2,506.80 crore levied by the DoT.

"Based on the figures worked out, it could be seen that total defective CAFs for the 7 major service providers was Rs4.20 crore for the year 2012. Even, if a minimum penalty of Rs1,000 is levied for each defective CAF, total penalty works out to be Rs 4,204 crore for the year 2012 alone," CAG said.

As per the CAG report, the penalty on RCom should be Rs918.3 crore, Airtel Rs906.4 crore, Vodafone Rs601.88 core, Idea Rs563.6 crore, BSNL Rs492.55 crore, TTSL Rs408.75 crore and Aircel Rs312.85 crore.

CAG has said besides DoT's failure to achieve 100-per cent compliance of subscriber verification rules, the findings of TERM Cells during regular monthly audits could not also be relied upon as surprise checks had revealed non-compliance to a large extent.

"The compliance level of most of the service providers was found to be very poor in cases of complaints / surprise checks by TERM Cells. In the case of some of the service providers, such as Tata Teleservices and Bharti Airtel, the non-compliant CAFs were as high as 84 and 55 per cent respectively," CAG said.

The auditor has suggested a better monitoring and enforcement system for the levy of penalties by TERM Cells, besides devising and implementing a comprehensive subscriber verification policy and ensure timely issuance of orders for achieving 100 per cent subscriber verification aiming towards strengthening the national security.